Logistics

The U.S - China Trade Conflict Timeline

A few months ago, we wrote a piece on what was the escalating trade tensions between China and the United States. The conflict is an ongoing topic of debate so we’ve decided to reformat in order to make sure you have the most up to date information for your business. Because you likely don’t have hours to mull over all of the threats and drama between Xi and Trump, we’ve condensed the timeline into, what we consider to be, the most important developments.

Many import businesses already have teams in place and are optimized for working with China so switching manufacturing to other countries can be a huge headache. While these trade disputes have generated very little good news for importers, fortunately, most of your competitors are experiencing similar issues and the new tariffs likely haven’t given you a competitive disadvantage. We’re optimistic that some face-to-face time at the G20 will help settle some tensions between Trump and Xi but these past few months have served as a great reminder of just how fickle major economic relationships can be. This fragile nature of trade has exposed the dangers of an overly concentrated manufacturing network and has taught us that there is really no such thing as a status quo.

As of this writing, the United States has imposed tariffs on $250 billion worth of Chinese exports. The complete lists of affected goods can be found below:

The Timeline

Trade talks resumed between the two countries. Trump and Xi are reported to be planning discussions to take place during November’s G20 summit in Argentina.

September 24

The US instated tariffs on List 3, affecting $200b worth of Chinese goods. As of September 24, the total value of goods affected by these new tariffs was $250b.

China responded by instating its proposed tariffs on $60b worth of US goods.

September 17 2018

USTR announced that there would be a 10% tariff on the $200b worth of Chinese exports that will go into effect on from Sept 24- Dec 31. Starting early 2019, the tariff rate on that list was proposed to increase to 25%. Immediately afterwards, China announced that it would impose tariffs on an additional $60b of US goods that would go into effect at the same time.

August 23

The US and China go forward and implement tariffs on $16b worth of goods in List 2.

August 3

In retaliation to the United States’ proposed List 3, China proposed a range of tariffs that would affect $60 billion in US products

As promised, the US and China both move forward with tariffs on the initial $34 billion in imports (List1). During this time, a second round of tariffs to impact $16b in goods on each side is under review (List 2).

The United States announced that it would be moving ahead with its proposed tariffs on $50 billion of imports while also announcing a plan to limit visas for Chinese citizens in an attempt to protect intellectual property.

May 20 2018

The United States and China appear to reach an agreement after China offered to significantly increase purchases goods of U.S origin.

May 3 2018

The United States and China began engaging in trade talks in Beijing. Here, the U.S demanded a trade gap reduction of US$200 billion within the next two years. No agreement was reached.

The U.S Trade Representative (USTR) announced the first list of products that would be impacted. That list contained 818 product lines comprised mostly of non-consumer products and included industries such as aerospace, technology, robotics, industrial machinery, medical equipment, and automobiles. The complete first list represented $34 billion in products and was set to be in effect as of July 6, 2018.

March 22, 2018

President Trump first announced that the United States would be imposing a 25% tariff hike that would impact $50 billion in Chinese goods imported into the U.S annually.

No matter which outlets you subscribe to, your newsfeed is undoubtedly filled with talk of the increasing economic tensions between the United States and China. Given that this is a resource for entrepreneurs and I’m not here to debate who the long-term economic winners and losers or predict the impact on international trade as a whole. The purpose of the post is simply to review what has been said, what has been put in motion and help you identify if there will be any immediate impacts on your business.

President Trump first announced on March 22, 2018, that the United States would be imposing a 25% tariff hike that would impact $50 billion in Chinese goods imported into the U.S annually. On April 3rd the U.S Trade Representative (USTR) announced the first list of products that would be impacted. That list contains 818 product lines comprised mostly of non-consumer products and includes industries such as aerospace, technology, robotics, industrial machinery, medical equipment, and automobiles. The complete first list represents $34 billion in products and will be effective as of July 6, 2018. You can see the full list of product lines here.

The second list covers 284 lines worth $16Billion in annual imports is currently under further review and does not yet have an effective date. The second list can be found here.

In response (yes, again) to the Chinese government’s tariff implementation, on June 18th President Trump threatened a 10% tariff on an additional $200 billion in Chinese products. He also stated that another $200 billion would be imposed if China retaliates further. These threats pretty much cover all over the United States annual $505.47 billion in Chinese imports. As of this writing, no product lines or official documentation have been released pertaining to these threats.

The trade landscape between China and the United States is changing very quickly so be sure to stay in the loop and monitor how these changes will affect your business.

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